U.S. Silica misses estimates, sees frac sand price recovery in 2019

(Reuters) - U.S. Silica Holdings (SLCA.N) missed analysts’ estimates for quarterly profit on Tuesday, as fewer oil well completions hit demand for its frac sand, and said it expected substantial price and margin recovery only in the second quarter of 2019.

The company’s shares slumped as much as 17 percent to a near six-year low.

A tight pipeline capacity in the top shale region of Permian has hampered efforts by U.S. producers to capitalize on the recent jump in crude oil prices, which was also reflected in the latest quarterly reports from oilfield service providers.

Fracking sand supplied by U.S. Silica is used in hydraulic fracturing where it is pushed into wells under high pressure to free oil and gas trapped in shale rocks.

The company said revenue from its oil and gas proppants business, its biggest, rose about 5.6 percent to $302.5 million in the third quarter, a steep decline from the 38 percent the company posted in the preceding quarter.